In a major financial blow to Chicago’s infrastructure ambitions, the Trump administration has halted $2.1 billion in federal funds, citing concerns over what it calls “race-based contracting” practices. The decision comes as part of a broader federal crackdown on diversity and equity requirements tied to public projects.
Mayor Brandon Johnson’s administration is now facing the consequences after the Office of Management and Budget (OMB), led by Russell Vought, confirmed that two major Chicago Transit Authority (CTA) projects — the Red Line Extension and the Red and Purple Modernization Program — are under review. The funding pause aims to ensure that no federal dollars are allocated through programs deemed discriminatory on the basis of race or gender.
The announcement follows a similar move in New York, where roughly $18 billion in infrastructure funds were frozen earlier this week. The Trump administration argued that both states were enforcing unconstitutional “DEI principles” within their contracting processes.
The U.S. Department of Transportation (USDOT) released an interim final rule banning race- and sex-based contracting criteria from all federal grants. In a statement, the agency said it had notified the CTA that its projects were being examined “to determine whether any unconstitutional practices are occurring.”
According to USDOT, the reviews are designed to “ensure no additional federal dollars go toward discriminatory, illegal, or wasteful contracting practices.” The statement continued, “The American people don’t care what race or gender their construction workers are — they just want these projects completed efficiently.”
The Department also noted that staffing challenges caused by the recent government shutdown, attributed to Democratic leadership in Congress, have slowed the review process. “Secretary [Sean] Duffy and USDOT are committed to completing these reviews as quickly as possible so reimbursements can move forward,” the statement read.
Critics argue that progressive city leaders like Johnson have prioritized political ideology over fiscal responsibility — a stance that may now cost Chicago billions in critical infrastructure funding. The administration, meanwhile, maintains that enforcing race-neutral contracting upholds constitutional principles and protects taxpayer dollars.
As political tensions continue to rise, one thing is clear: Chicago’s leadership just received a sharp reminder that the federal government under President Trump isn’t afraid to back its words with action.
